Topic: Mega Miners, these last two years (Read 506 times)

people tend to forget that miners don't need  a huge amount of reward to sustain their activity, when all the coins will be mined and the supply depleted

i'm sure efficiency will be so high, that miners will basically mine for free, and thus in the fee era, they would be able to continue to mineeven if bitcoin will not touch crazy value

and anyway mega centralized farm, was designed since the beginning by satoshi, there is even a quote of hims aid so...it's not a flaw by any mean

This is just a problem with the nature of bitcoin itself, a technology problem which I think has been solved by Dash, but it's very hard to imagine this solution been introduced to the bitcoin blockchain via a hard fork. At this stage I don't think Bitcoin will ever been that decentralised again, it will just go on to replace the global trusted intermediaries in banking, and be more of a tool of the establishment, while also allowing the public to continue using it without having to trust anyone either.

This gen of asic might run longer than the last two? People seem to be building out their farms for the 12.5 btc era right now. Some of the older gear will turn off for the halving but it will be outpaced by new gear coming on. Ramping the difficulty all at once has a habit of deterring competition (especially from the small guys), which means greater profitability during the lifetime of the hardware (optimistically 3 years).

Expect more of this stuff:
https://megabigpower.com/index
Provide financing to fill out a current warehouse, or if you have a space, they'll provide and install the hardware, you split revenue 50:50.

Short term things are fine, long term's a little more dicey. I see 4 major options.

1. Block size and number of tx raises, continuing the low cost value transfer attribute of today. Miners chose appropriate block sizes to maximize profit along their demand and supply curves.

2. Relatively the same amount of hodlers as exist today are fine with $3-7 fees per tx. Former payment users are (partially?) replaced by digital-goldbugs. Bitcoin stays around the same size in terms of market cap, maybe grow some or shrink some, nothing fatal.

3. Payment channels emerge from vapor stage, the added complexity and need of opening channels by locking up some btc isn't an impediment to network growth... Large fees are paid when these scripted arrangements are settled to the blockchain. Although LN is open source and free... Blockstream is added to the s&p 500 somehow.

4. (3.) doesn't really work. Former users of btc migrate to competing options, some hodlers tuck away the private keys and hope for the best, some muck (or have mucked) their hands and move(d) on.

The trend has been very clear the last two years, towards more and more centralization. Bitcoin cannot afford to have these mega miners who are only interested in lining their pockets. This will be downfall of bitcoin.

Are we going to start seeing efficiency in new fabrication slow down?? I think if new ASIC fabrication efficiencies can slow down such that a miner can have a 5 or 10 year service life that will help.

I would spend 5k on a miner if I had any confidence that it would not be a paper weight in 9 months.

I can think a few things can slow down large mining operations

1) access to power becomes more universally priced... right now free power is the #1 advantage to the mega miner.
2) costs to entry into your own super mine have to come down, meaning the technology jumps in hash per watt have to stabilize

Lower difficulty is the only way smaller operations can come back and lower price will be necessary to curb the desire to attack if difficulty is low. So it is necessary for these large operations to stay. The best thing that can happen is for more medium to large scale miners to come into the space. If it becomes too monopolized it will be bad too. So basically, we're fucked in the long term. The centralized nature it has become will lead to few giant miners and they will have complete control over the network. Of course they won't do anything detrimental yet, but there is no telling when profitability gets small enough for them to move on to their next venture

We are obviously in the mega-miner era of Bitcoin, however, I wonder how long it will last. I think if we continue the era of the mega miner bitcoin may likely be doomed.

What will end the mega miner phenomenon, when no coins are available to mine???  What has to change for mining operations to be smaller. Does Bitcoin have to crash? The bigger the price, it seems it only encourages larger capital to invest in their own fabrication and mining.